Drugmakers’ Shares Gain Before Cancer Medicine Data Revealed, Study Finds
By Ryan Flinn - Sep 26, 2011
Drugmakers tend to surge in the market months before they report positive data on clinical trials of cancer medicines and decline when the trials fail, raising concerns that insider trading may be linked to the research, a study found. The study, published today in the Journal of the National Cancer Institute, looked at stock price movements before pharmaceutical companies released results on the third, and often final, drug trial necessary for approval. Companies that reported positive news on their experimental cancer medicines had share gains of 14 percent on average in the 120 days before the announcement, while companies reporting negative news declined 0.7 percent, according to the report.
interesting article about insider trading! I agree that BZ is a great value, but I need to correct a mistake the you make repeatedly about the enterprise value. The market cap being a certain fraction of the enterprise value doesn't tell you whether the stock is undervalued or not, but only tells you how leveraged the company is. So when you say that the market cap is 50% of enterprise value, that is a scary number-- the value of the company's debt is as large as the market cap.